The financial watchdog says it is considering a ban on ‘toxic' loan combinations, including elements such as a high loan-to-value (LTV), interest-only and sub-prime in a single deal.
In a speech on the Mortgage Market Review (MMR) to the Council of Mortgage Lenders (CML) yesterday, FSA small firms director Lesley Titcomb, punctured speculation this week that a ban on LTVs over 75% was on the table. She dismissed bans on loans above certain "loan-to-values, loan-to-income or debt-to-income thresholds as "blunt" tools. The FSA will rule on the ban in a paper due out in July. The decision will be based on the regulator's analysis of 4.5 million loan transactions and the arrears levels on different types of loans. "We want to stop problems before they cause widespr...
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